Key puts another coin in the fuse box
National Party leader John Key called yesterday for the scrapping or the delay of all the climate related fuel taxes on the agenda for the next year, citing rising fuel costs as the reason. At first glance there appears to be some logic in his argument, until you look at it fully.
What he is arguing is that because rising oil prices are blowing the fuse on household budgets, we shouldn’t fix the fault but should instead put a penny in the fuse box and pretend that it is fixed. Rather than spend the money now on a credible alternative to the car, (public transport and other mode shifts), we should wait until it’s a real crisis and the house is burning down.
Pity is, he didn’t even think of it himself. John McCain, the US Republican candidate for President, made similar calls two weeks ago. The Key difference is that McCain was calling for a tax holiday on all excise taxes, whereas Key only wants to scrap the environmental taxes and keep the excise taxes coming in. (How else would he fund all those roads?)
In both cases our right wing candidates are pandering to their only real policy point - cut taxes. Everything else is negotiable. Both candidates are labouring under the delusion that the current spike in oil prices is just a blip, like it was in 1973 and again in 1979. Meanwhile, Bill English was on Morning Report this morning, saying that these environmental fuel taxes were based on questionable reasoning, a direct dog whistle to the climate change deniers. There is no way that Key could have made such a statement, but English can. Having committed to the Emissions Trading Scheme, National is now sending signals that it might be gone by lunchtime should they be elected.
For more on the metaphor, read this post More Coins in the Fuse Box.
April 30th, 2008 at 11:57 am
So I imagine that you/the Greens are in favour of keeping the regional fuel taxes (and, grudgingly, the ETS), but you would mitigate the effect on people’s wallets through…income tax reductions?
April 30th, 2008 at 12:07 pm
One would hope he’s planning to dump the entire enviro-penance-tax “strategy” lock stock and barrel….
Perhaps we could do something useful with the money. You know, like building electricity generation.
April 30th, 2008 at 12:09 pm
“we”? the state?
April 30th, 2008 at 12:10 pm
You don’t think the ‘enviro-penance-tax’ will reduce emissions?
April 30th, 2008 at 1:13 pm
Key is onto a winner with this policy, he has finally started to read the mood of the nation.
April 30th, 2008 at 1:21 pm
Have to agree with bill English in regards that “environmental fuel taxes were based on questionable reasoning”.
Nowhere, but nowhere is there any figures out there that say by increasing fuel prices you will save the planet.
carbon foorprints, carbon trading , carbon offsets, etc. are all words used by the money grabbers (corporate and state) to justify increasing fuel prices.
Noticed the record profits made by Shell and BP? (about 7 billion for the quater)
Noticed the record tax take by cullen?
April 30th, 2008 at 1:29 pm
StephenR
No, we the people. I have no faith in “the state” anymore….
April 30th, 2008 at 1:30 pm
>>reduce emissions
Who gives a toss about reducing emissions? AGW or not, we won’t make the slightest bit of difference. If we waste money unwisely, people will die. Guaranteed.
April 30th, 2008 at 1:34 pm
I would imagine frog would want to provide a more definitive answer, but, Gerrit, it would depend what the money (that the government receives) is spent on wouldn’t it? I think this sort of coincides with BP’s very vague answer about ‘we the people’, but say, subsidies for home solar panels or any other sort of ‘distributed generation’ type system would have to have some effect.
“Nowhere, but nowhere is there any figures out there that say by increasing fuel prices you will save the planet.” Also not sure what you mean by ’save the planet’, but increasing fuel prices encourage fuel conservation/less use of that particular fossil fuel as well as the development of alternative fuels, such as the various forms of ‘biofuels’ we have right now (ethanol, biodiesel, cellulose, tallow etc.)
April 30th, 2008 at 1:46 pm
You’re sounding quite alarmist there BP…? The amount of money would depend on the allocation of caps, and from what I hear, people are not dying in Europe because of their (slightly over allocated) ETS scheme.
April 30th, 2008 at 1:56 pm
Gerrit is absolutely right.
There is no practicable way to exchange carbon and money. You cant collect taxation as a monetary value and then somehow convert it into anti-carbon to undo the carbon already emitted. Its a sham.
Just yet another money redistribution scheme, which as ‘Bro would point out, (and my tounge is only slightly in my cheek here) is the preserve of the communists.
So on this issue I find myself aligned with Key.
If he carries on like this he may find himself holding the big baubles…
April 30th, 2008 at 2:10 pm
There is a simple opportunity cost.
More money spent on hot air means there is less money available for health, education, welfare, etc.
April 30th, 2008 at 2:10 pm
I thought the point was that by progressively lowering emissions caps (when you go over them you pay x amount as determined by the market), then a better idea is to lower emissions rather than directly pay for the emissions. I was also under the impression that the money is not even being collected by the government i.e. ‘it’s a market’
April 30th, 2008 at 2:19 pm
“subsidies for home solar panels or any other sort of ‘distributed generation’ type system would have to have some effect.”
In the scheme of things they have no effect whatsoever- they just don’t generate enough power. The money for toy windmills or useless solar panels should NOT come from public funds. If you want such toys great, but don’t expect ME to pay for it!
The aggregate money would be far better spent on a large scale hydro project which has been proven reliable and cheap time and time again. Unfortunately the Greens are now against hydro power, and prefer their fantasy imaginary solutions to our looming electricity supply shortfall.
Engineers are needed to solve this problem, not environmentalists.
As for green taxes on fuels, will they just go to buy carbon credits from the Russians? Is there any way this money can be kept on-shore by clever NZ entrepreneurs investing in carbon sinks?
April 30th, 2008 at 2:25 pm
>>a better idea is to lower emissions rather than directly pay for the emissions
Depends on the price.
And an emissions tax is artificial anyway. It’s a tax on nothing.
April 30th, 2008 at 2:31 pm
Isn’t it a tax on an output (or externality in this case) (emissions), like income tax is a tax on a different sort of output (money earned from labour). Both measurable…
April 30th, 2008 at 2:42 pm
StephenR
Yes it is going to be “a market” A market where the Al Gores buy carbon credits without any independent auditing that they exist and continue to be carbon sinks.
He clips the ticket for 30% and you have to buy them to make sure you stay under your emmision target.
See any problems there, corruption even, maybe shonky deals on both the carbon sinks and the credits?
Yep, New Zealand is going to be paying about $1Billion per annum to the Russians and you know as well as I do that the money will end up increasing the Siberian Forest carbon sinks not one jot.
Soemtimes I think we in New Zealand are easily suckered into these scam’s.
Now if we take UK_Kiwi’s idea and spent that money per annum on electricity generation infastructure in New Zealand (nuclear, tidal, wave,windfarm, etc.) I would be a bit more lukewarm on the suggestion.
But to ship a billion dollars to Russia every year for what again?
April 30th, 2008 at 2:51 pm
>>output
May as well tax talking. It’s an output, after all. Quite measurable…
It won’t make the planet any cooler, though.
I’m with Gerrit. It angers me that our politicians have been suckered in, once again. Is there a worlds stupidest country award we’re so desperate to win, or what?
April 30th, 2008 at 3:05 pm
Only a matter of time before Al got mentioned wasn’t it…
Well talking only exists in the abstract past tense, I would say.
One suggestion was to pay rain-forested countries to ban burning their forests in order to prevent emissions that arise as a result (Brazil being a rather large source of this source of carbon).
Obviously there are a number of electricity options, all with their particular issues (the only one I see with nuclear is wildly varying cost estimates, which take into account a large number of factors), and if there is a market for no/low emissions technologies (as there presumably will be with the ETS) then the generation will be built, after going through the RMA of course, which allows for citizens’ input, as was the case for that rather large dam down south…
April 30th, 2008 at 3:09 pm
I think what English is saying is that the 5cpl regional petrol tax earmarked for trains is not going to make much difference to the travel patterns of Aucklanders so perhaps we can live without it for a while. We have had evidence of that this week in the report on PT uptake (very very low).
April 30th, 2008 at 3:17 pm
“live without it for a while”…until petrol is $2-50 a litre, then people will REALLY be wanting other options! If that is his thinking, then BOY is he short sighted, unless he has some other solution.
April 30th, 2008 at 3:17 pm
Also, what report on PT? Online?
April 30th, 2008 at 3:18 pm
Key is wrong because. NZ’s malaise has been, for many years now, our balance of payments deficit. We spend more than we earn. I’d far rather see an income tax cut, ie it gets cheaper to earn, rather than fuel tax cuts, ie it gets cheaper to spend. As a nation we need to earn more and spend less.
As to increasing prices saving the planet… I don’t know about you guys but the cost of fuel has certainly modified my behavior now instead of driving to town on a whim to buy a stamp I wait till I have many whims to pursue.
“National is now sending signals that it might be gone by lunchtime should they be elected.” All the more reason to snuggle up to the nats and assist them to stay on task
April 30th, 2008 at 3:38 pm
Stephen
I think it might come from this http://www.nzherald.co.nz/section/1/story.cfm?c_id=1&objectid=10499248
but RNZ and not PC had something on Monday
http://www.radionz.co.nz/audio/national/mnr/auckland_bus_operator_laun ches_discount
April 30th, 2008 at 3:42 pm
Stephen
I’ve commented twice but not sure if my posts are going into moderation because they have links in them, but there was a report on Monday on morning report which you;ll have to look up yourself. It says bus use has hardly moved in 6 years and trains are cannibalising buses.
April 30th, 2008 at 4:03 pm
“Only a matter of time before Al got mentioned wasn’t it…”
Absolutely as he represents everything that is wrong with carbon trading and the ticket clippers.
Using emotive movie clips to tell a story which is only half correct, to fuel his motive that is pure ego and self service, not interested in the planet at all (judging by his own carbon footprint - what was his monthly power bill again?).
Havent heard much from Al lately. Still around? When is the next movie out? The one where he discussed how much the land level rose after the last ice age (some 300 metres through the North American continent). And how the vast North American inland lake created by the melted ice, flowed into the Atlantic as the land mass rose after having the burden of the ice cap lifted from it.
April 30th, 2008 at 4:09 pm
Yeah thanks insider. So train use up 11% in the latest half year figures, but rail accounts for only 11% of public transport use. And there is some upgrading going on at the moment anyway ($1 Billion as the report said, as well as $11 billion over 10 years on road and rail - I think the Onehunga line is one, can’t remember others), so very reasonable to assume that figure will continue to grow as it becomes more accessible.
* Northern Express buses …. up 34%
* All other scheduled bus services …. down 2.2%
* School buses …. up 2.8%
* Trains …. up 11.6%
* Ferries …. up 1.6%
* TOTAL …. up 0.4%
I just want more alternatives to buying or using a car cos of the petrol price - how does anyone propose to make that happen?
April 30th, 2008 at 4:17 pm
When you’ve a decades long PT investment deficit to overcome; AND decades of poor planning by regional govt; AND decades of poor investment by homeowners, then it will take time to turn things around.
You also missed the comments (in the Morning Report snippet) by Mike LEE of ARC who said he wanted quicker results and Bruce Emson (?) of one of the service operators who have ideas for better services.
Come down to Chch to see how it is done. The average ratepayer pays less than $3 per week to provide modern efficient services. Passenger growth here is way ahead of ambitious targets - showing PT is the way forward.
Why are we surprised that Akld once again is lagging behind.
April 30th, 2008 at 7:02 pm
Alright, for all you Greenies out there, why should a fuel tax pay for Auckland electrification? And before you answer, consider the following:
Who paid for Wellington’s electrification?
Who paid for the ED locomotives?
Who paid for the EW locomotives?
Who paid for the English Electric Units?
Who paid for the Ganz Mavag Units?
Who is going to pay for the Korean Units?
April 30th, 2008 at 7:14 pm
I wouldn’t have a blaaardy clue.
So who *does* pay for Auckland electrification?
April 30th, 2008 at 7:30 pm
john-ston - fair point, but recall that the Muldoon Government vetoed electrification 30 years or so ago.
Neither Labour or National appear to support paying for it directly from general taxation (unfortunately), so what are the choices now?
And if it means a public transport system that is more reliable, has more capacity, is more frequent, is cheaper, and thereby gets unnecessary passenger vehicles off the road and relieves road traffic congestion, then it has to be good for motorists who will pay the tax too.
April 30th, 2008 at 9:30 pm
Toad, I know this is going to sound wierd, but I think that Muldoon was correct in cancelling the Rapid Rail scheme of the 1970s. The problem with the Rapid Rail scheme, along with the Busway scheme of the 1980s and the Light Rail scheme of the 1990s was that it involved the construction of a parallel network - the Rapid Rail scheme would have turned Auckland’s rail into a Metro, and that was at the time, and still is, not the most desirable idea - remember that we have to fit freight along our rail corridors too; and Adelaide is in fact a good example of how awkward it is to have two parallel corridors (the Belair Line there has one line for freight and one line for suburban services, both of different gauges, and there have been campaigns for over a decade now to make both lines standard gauge, the latest one being spearheaded by the Family First Party).
Had Myer-Robinson proposed something along the lines of Brisbane’s electrification plans of that era - i.e. 25kV AC electrification along the existing network plus expansion, then I think we would have had electrification far sooner and maybe ended up with some EMUs that looked like Brisbane’s first generation EMUs. Let us not forget that the same government paid $600 million for NIMT electrification from Hamilton to Palmerston North; the same government paid $33 million for the Ganz Units and the same government funded the electrification of the Paraparaumu to Paekakariki section. Muldoon himself acknowledged that Auckland would need a good rail system. The problem wasn’t so much the idea but the execution - Myer-Robinson had a good overall idea (electrification), but the details were lacking (standard gauge at 750V DC on third rail).
In terms of National not supporting it from direct taxation, I believe their announcement would suggest otherwise. They are perfectly willing to carry on with the status quo, even if it means supporting it from general taxation, while they sort out an alternative, so I don’t think that the idea of electrification is under threat. The fuel tax is under threat from them though, and I believe it is fair, considering that Aucklanders contributed millions of pounds and millions of dollars to the afore mentioned projects (EDs, EWs, &c).
May 1st, 2008 at 1:30 am
So who *does* pay for Auckland electrification?
The answer is elucidated in this year’s NLTP. The motorists of Taranaki, Manawatu, Hawke’s Bay and the South Island are currently paying 18 cents per litre to fund the Crown’s contribution to the RLTPs of Auckland, Tauranga, Waikato and Wellington. Of the beneficiary regions only Waikato has extraordinary reasons to justify receiving largesse from poorer regions than itself.
The biggest losers from the petrol tax to the end of last financial year are Canterbury -$2.1bn, Waikato -$1.75bn, Auckland -$0.9bn, Taranaki -$300m. The biggest winners are Gisborne +$1.3bn, Northland +$1.2bn, West Coast +$1.1bn, Wellington +$700. Wellington’s subsidy is for the Ngauranga-Te Aro motorway whereas in the other regions the subsidies built vital tourist highways that the whole country benefits from.
Transit’s travel time studies March ‘04, ‘05 & ‘06 reveal the following average speeds on weekdays 6am thru 6pm (expressed as per cent of the average speed limits on the survey routes): Auckland 66.1, Tauranga 67.4, Wellington 67.1, Christchurch 65.6
So much for the official reason for Auckland’s subsidies.
It seems Jim aint as good a negotiator as Helen, Peter and Winston
The fact that a flat city with no motorways and good bus and cycle facilities actually has more cars per capita, more km per car and consequently more congestion than Auckland (City) should alert us that something isn’t quite right with the popular theories that try to explain car dependence and ways to reduce it. Actually, Christchurch City sans Bank Peninsula is less densely populated than Auckland City.
May 1st, 2008 at 1:41 am
Christchurch has always subsidised Auckland and it probably always will.
No body in wellington ever listens to Canterbury.
I remember my commute in Christchurch when I lived their years ago it was horible. BTW Christchurch has a pathetic bus system so i wouldn’t call it good.
May 1st, 2008 at 1:49 am
That’s a big if toad. San Francisco’s experience is that the investment in BART had no effect on peak congestion and minimal effect off peak. The failure to get land around BART stations rezoned for TODs may have been BART’s Archilles Heel as gar as the minimal impact on off peak congestion goes. It was BART’s zero impact on peak congestion that triggered the research path that revealed so much about induced travel. That isn’t to say that BART failed to reduce total traffic growth and emissions, it simply failed to reduce peak congestion which is the only congestion drivers have shown any great willingness to pay to avoid.
May 1st, 2008 at 2:47 am
All polution released into my air should be taxed, might make them stop destroying my world.
As for fuel tax, i say WHERE CAN I GET A ELECTRIC CAR?
May 1st, 2008 at 3:28 am
turnip, The CTB is dead and buried. Competitive tendering and all that. A covered bus exchange instead of the cold windswept square. Super low floor buses instead of the ancient Bristols. Shorter routes. GPS tracking ETAs to your mobile.
It might still be faster to treadly but I’m not young and stupid anymore.
May 1st, 2008 at 4:37 am
Kevyn glad to hear ChCH public transport has improved.
however chch still has a single exchange point, when in reality it should have multiple exchange points, most modern cities require this unless the city planners clearly define a point in the city where everyone is going to work, something CHCH has never done.
I’m sure someone can point out my problem with riding the Bus, Hint
I live in the NY area and I don’t ride the bus but do ride the subway.
So whats my problem with riding the bus?
My problem is that the Bus must share the road with cars and cars cause congestion which slows you down. When I ride the bus I should be moving considerable faster than you driving in your car. The only way to allow this is bus lanes. How do you put bus lanes into a city like christchurch it just isn’t possible.
If I move back to chch will i use the bus, the answer is no why becuase the city council hasn’t made using the bus better than driving.
I live in the NY area do I use the subway YES, why because its faster and easier than driving. You need to make both those conditions true in order to get people to use public transport, I just don’t see how you can do that with Buses, oh BTW I know quite a bit about buses and the CHCH bus system my dad has driven buses in CHCH all his life so I think that would give him more knowledge on the subject than anyone on this blog.
People will only use public transport if it is faster, easier and cheaper than private transport until you have met the above conditions no one is going to ride it.
May 1st, 2008 at 9:32 am
Kevyn -
So who *does* pay for Auckland electrification?
The biggest losers from the petrol tax to the end of last financial year are Canterbury -$2.1bn, Waikato -$1.75bn, Auckland -$0.9bn, Taranaki -$300m.
So you blast Auckland for getting subsidies for rail electrification (half of which will be paid for by Auckland’s regional fuel tax anyway), then you point out that Auckland has a petrol tax deficit (Auckland -$0.9bn) of more than the $500m that the central govt is offering for the rail. Can you explain the math to me as to how Auckland is being subsidised for this worK? Your own figures suggest that they are just getting their own back.
May 1st, 2008 at 3:17 pm
Anyone seen this:
Elections, Hot Air, and Gas
Applicable here too?
May 1st, 2008 at 9:24 pm
Auckland isn’t getting any part of rail electrification subsidised. The government intends to use its part of the fuel tax to pay for the electrification infrastructure - i.e. Auckland has to pay every cent of electrification, while Wellington only paid for about an eighth to a quarter of its electrification & rolling stock.
May 1st, 2008 at 11:58 pm
turnip28 wrote:
“however chch still has a single exchange point, when in reality it should have multiple exchange points…”
They’re working on it. However there are already defacto exchange points, outside Riccarton Mall (Orbiter, Metro Star and several radial routes), Bush Inn (as above), Palms (as above), etc. Waiting times could be a problem…
Trevor.
May 2nd, 2008 at 1:05 am
john-ston, Please read Sections 7 & 9 and Schedule 2, clause 2(2) of the Land Transport Management Amendment Bill 2007 for the government’s actual intentions for funding the electrification of Auckland’s railways.
May 2nd, 2008 at 2:23 am
frog, in order to answer Stephen’s question it was necessary to step outside the terms of reference to provide the correct context viz-a-viz the Land Transport Fund. The only unfair subsidy I mentioned was the one for Wellington’s Foothills Motorway.
I didn’t blast Auckland for getting subsidies for rail electrification. I blasted the government for continuing to give preferential treatment to Auckland relative to Taranaki, Waikato and Canterbury when the original reasons provided by the government have been proved false. Perhaps that point would have been clearer if I had mentioned how much those four regions losses had changed since 1999. Auckland was -$1.8bn, Waikato -$1.4bn, Canterbury -$1.6bn, Taranaki -$250m. Taking a totally nonegalitarian view that we should always have had regional funds instead of a national fund we can go a step further and break those overall losses down into the seperate maintenance and construction funds that we originally had when the petrol tax was introduced. Waikato, Taranaki and Canterbury’s losses come almost equally from these two funds. Auckland’s comes entirely from it’s maintenance fund losing $2.4bn, 1.8bn to other regions and .6bn to Auckland’s construction fund. Very simply, during the 20th century Auckland was receiving more construction funding for it’s amount of traffic than most other regions except the four I mentioned as big winners, of which I consider only Wellington to be undeserving of that assistance. Note that Auckland’s construction “subsidy” up to 1999 had come from itself and if the petrol tax had been indexed to inflation from day one their would have been no need for interregional subsidies or ratepyer subsidies, and probably noticably less traffic growth.
You might enjoy this Herald editorial on similar shenanigans by Dick Seddon a hundred years ago, rail being the infrastructure dujour, and North Auckland being the provincial district getting shafted.
My point is that the Crown contribution has been allocated to politically “needy” regions rather than those actually in need.
The last increase in the petrol tax was supposed to be allocated on a per capita basis so why is Canterbury still losing one-third of it’s hypothecated petrol taxes and RUCs? LTNZ has indicated that when the full petrol tax is hypothecated Canterbury will receive only half of the money it pays to LTNZ. Yet according to Transit Christchurch has slightly worse congestion than Auckland and State Highways that are three times deadlier. SH74 between Lyttleton and the northern motorway must be the roughest peice of urban highway in the country. The northern motorway doesn’t meet Transit’s safety standards, a fact that two people their lives last year and yet Transit has no plans to bring it up to standard.
Is the half of the regional tax being spent on electrification to come from the 5cents to fund projects “identified by the Auckland region as priorities for that region” or the 5cents to fund projects “that the responsible Ministers have identified as priorities for the Auckland region”? What is the $285m included in schedule 2 clause 2(2) “for the purposes of upgrades and renewals of the below track Auckland rail infrastructure” paying for? I presume the foregoing is in addition to the $130m commitment to Auckland Land Transport in sched 2 c8(1), which presumably is in addition to the gauranteed 35% of regionally distributed funds.
May 2nd, 2008 at 2:28 am
Sorry frog, forgot to put the link in for those editorials.
http://www.petroltax.org.nz/akmotorways.html
(in last sentence on the page)
May 2nd, 2008 at 9:26 am
Cheery Kevyn.
May 2nd, 2008 at 10:04 am
Kevyn, unless the ARC is as confused as me, this is what is going to happen
“If, after consultation, the ARC submits the proposed regional fuel tax scheme to the Government for approval, the Government has announced its intention to add up to a further 5c per litre to the regional fuel tax to fund its share of the electrification project, and to support other roading initiatives, as provided for in the draft legislation.” (page 48)
This comes from their Draft Annual Plan - the government is intending to pay for it with the fuel tax, but should the fuel tax fail, they will run it with general taxation. Of course, the whole thing should be funded from general taxation.
May 2nd, 2008 at 1:19 pm
john-ston, Thanks, That clarifies things immensely.